Edited version of private advice

Authorisation Number: 1052451553281

Date of advice: 15 October 2025

Ruling

Subject: Income Tax Exemption - Capital Gains Tax

Question 1

Will you be liable for income tax or capital gains tax on the disposal of the property?

Answer 1

No, as you are an entity that was exempt from income tax at the time of the disposal of the property you will not be liable for income tax or capital gains tax on the sale of the property.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The entity was established over XX years ago.

You were registered with the Australian Charities and Not-for-profits Commission (ACNC) as a charity from the commencement of the ACNC until after the relevant transaction. You met the rules to be a registered charity under the previous legislation.

You have at all times until after the relevant transaction been an entity exempt from income tax in accordance with Division 50 of the Income Tax Assessment Act 1997.

You purchased a vacant block of land in 2016 (the property).

X house was built on the property and was used by you in your charitable activities.

You have never rented the property out or derived income from it.

Your members have resolved by way of special resolution to wind up the entity and distribute the surplus assets to relevant entities as outlined in the constitution of the entity.

You appointed a Liquidator for the purpose of winding up.

The property was sold at auction, while you were a registered charity and met the conditions to be exempt from income tax.

You made a capital gain on the sale of the property.

The Liquidator will use the proceeds from the sale of the property to finalise any remaining debts and then distribute to the relevant entities.

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 50

Income Tax Assessment Act 1997 section 104-10